How to Find All Your Debts: 4 Tips

Paying off your debts is a critical part of a healthy credit profile. Here’s what you need to know about how to find your debts.

It’s uncomfortable to admit, but it’s entirely possible that you have debts you didn’t even know about. Whether mail went missing or communication about medical debt got mixed up, it’s possible an account with your name on it is languishing somewhere in collections. Get some tips to find out all your debts so you can make educated decisions about how to clean up your credit history.


How to Find All Your Debts

Even if you keep meticulous records, it’s possible for some debts to have fallen through the cracks. And perhaps you know you owe a debt, but it’s been passed around between collection agencies so many times you’ve forgotten who currently owns the debt. Here’s how to find out which collection agency you owe or uncover debts you don’t know about.

1. Check Your Credit Reports

Our first tip for finding your hidden debts is to turn to your credit report. While not every debt is reported, many are. And if you’re in collections or have owed the debt for a while, chances are someone has placed a negative item on at least one of your credit reports.

The trick here is getting copies of all three of your credit reports from the major bureaus. Not all creditors report to all three, so TransUnion, for example, could have a detail that Equifax and Experian do not—and vice versa.

You can get one free copy of your credit report from each agency every year at AnnualCreditReport.com. (They’re available weekly for a limited time due to COVID-19.) But for those who really want to get a handle on who they owe and what’s on their report, a service such as ExtraCredit is a good choice.

ExtraCredit lets you see your credit reports from all three bureaus—anytime. The reports are pulled monthly. It also gives you regular updates on 28 of your FICO® scores, so you have a clear picture of what your credit history looks like to lenders. Plus, you can get rewards and offers for valuable credit services, including credit monitoring and credit cards.

2. Go Through Old and New Mail

Who among us hasn’t picked up the mail, only to put it in a stack by the front door and leave it there to languish for months? Life gets busy, and it can be tempting to slide unopened envelopes into a bin or drawer and forget about them. But mail can back up before you realize it, and you might miss a notice of a bill or debt.

Take some time to gather all the mail you have. Open it and sort it, carefully looking to see whether you need to take action on something or if you might owe someone money. Keep a notebook or computer nearby so you can make a list.

3. Listen to All Those Old Voicemails

Voicemail can back up just like snail mail. Many people never actually check their voicemail, assuming those who need them will call them back or text them.

Legitimate creditors and collections agencies should leave a voicemail, including contact information. They’ll also usually show up on your caller ID. 

Clear out your old voicemail, listening to each one and making notes about it. Compare that information with the notes you got from your mail and what’s on your credit report to compile a master list of debt you might owe. Keep an ear open for potential debt collection scammers and do your research before following up with anyone.

4. Contact Creditors You Think You Owe

In some cases, you know you owe someone, but it’s been a while. You can contact the last creditor you remember and find out if they still own the debt or if they wrote it off and sold it to a collection agency. They should be able to confirm your debt and give you the name and contact information for the agency that they sold the debt to, if applicable.

What to Do After You Find Your Debt

Once you go through a debt finder process and figure out who you owe money to, you have some decisions to make. Here are three tips for dealing with debt once you find it.

1. Decide Whether You Can—or Will—Pay

You might rush to pay off old debts thinking it will boost your credit, but that may not happen. Yes, the debt should then be marked as paid on your credit report. But the damage from the late payments and collection accounts could still linger.

So, you need to consider seriously how you can and will deal with old debt. If you simply can’t afford to pay, talk to a legal professional about your options, rights, and what consequences could come from paying or not paying old debt. For example, if you start making payments, the statute of limitations could restart and leave you at risk of lawsuits and legal collection activity much longer.

2. Consider Credit Repair Services

One result of digging through credit reports and chasing down old debt can be finding errors or collections you don’t actually owe. If you find inaccurate information on your credit reports, you might consider working with a credit repair service.

Credit repair services work on your behalf to dispute inaccurate information with the credit bureaus. You can actually do credit repair yourself, but if you don’t have time or just know you aren’t going to follow up, you might get more value by paying professionals to handle it for you.

3. Keep Up with Credit Reports and Debts in the Future

Finally, once you do the work to find your debt and clean it up, keep up with your credit reports in the future. While every single debt may not appear on your credit report—or appear right away—staying on top of your credit report ensures you’re aware of most of them. ExtraCredit gives you the access to your accounts that you need to keep track of your debts and your credit score.

Bonus Tip: Once you’ve found all your debts, use a debt management app like Tally to keep track of them moving forward so you’ll never have to wonder about them again.

TL;DR: ExtraCredit Could Help You Identify and Manage Your Debts

If you’ve lost track of your debts and what you owe to who, it can take some work and time to track everything down. But once you do, stay ahead of these things with help from ExtraCredit.


Source: credit.com

Can You Sell a House and Buy Another at the Same Time? We Explore Your Options

When you are in the process of moving, the process of buying your new home and selling your old one usually involves choosing which one comes first—to buy or to sell. Selling your old home first is often a more sensible option, as this ensures you have the needed down payment to cover your new property. But if you sell and don’t have a new home waiting for you, you might end up scrambling for a place to stay and someplace to store your belongings. For a family with kids or with pets, that can be especially inconvenient.

Buying before selling is an alternative, but when market demand is low and you can’t sell your old home quickly, you might end up with a lot more obligations than you can handle. You now have two homes to maintain and two mortgages to pay. If you’re on a tight budget, this could put you in hot water. 

What if you decide to buy and sell at the same time? This strategy can work well if you have reserves or some investments to sell to come up with the needed amounts to buy your new home if that occurs before your sell your old one. But if you’re someone who doesn’t have a lot of extra cash to spare, you need to develop some ideas to push through. 

Selling and buying simultaneously will require some ingenuity on your part as this strategy calls for thoughtful planning to time your sales and purchases. While you may not control the entire housing market, there are steps you can take to make sure you pull off both transactions. 

We’ll fill you in on some of the options to make sure you succeed in selling your current property and seal the deal to your new home at the same time. We’ll also cover some contingencies just in case you encounter a gap between selling and buying so that you won’t end up homeless at the very least.  

Options for Buying and Selling at the Same Time 

As mentioned, there are several options you can explore when you plan to buy and sell at the same time. These alternatives can help you manage not only the buying-while-selling process, but it can also keep your stress levels at a minimum.

#1 Find a Cash Buyer for Your Home 

Selling your house requires exact timing and demand from the market. Some markets, like the Florida housing market, are quite in demand right now, but others may not be, so plan out your timeline accordingly and take that extra time you may need to sell into account. You can sell your house fast in areas with high demand if you partner with an instant home buyer or a real estate investment company that offers to pay in cash rather than waiting for buyers to have their mortgages approved. 

This way, selling your house gives you the needed resources to fund your next move when you’ve already closed the deal. If ever you’re still looking, accessible funds ensure you can find temporary arrangements until you’re ready to find a new home.

#2 Talk to a Lender 

In case market demands are low and you can’t sell your house quickly, you would need to consider if owning two homes are feasible for your budget. While cash reserves can get you as far as a few months of the double mortgage, you may need to sell a few of your assets to maintain both properties. 

If you find your savings or income insufficient, you can consider talking to a lender to generate some funding. They can provide you with several loan offers that use your home’s equity as a down payment for your purchase. 

One of them is a bridging loan, short-term financing that can work great when you’ve already chosen your new property and acquiring it is in the works. You can even add a contingency clause that your purchase will only go through if your bridging loan gets approved so you can walk away without any additional obligations.

Another option is to take out a home equity line of credit (HELOC) that gives you greater flexibility to repay only the amount you use for buying your home. A HELOC uses your home’s equity as a basis to issue amounts you can use based on agreed terms that will help you get by until you sell your former home.

However, while these loans can give you access to immediate funds, they often come with considerable interests and lengths. It would be best to give it some careful thought before you take out any of these loans

#3 Make Attractive Offers 

Part of a successful strategy is to make attractive offers for the home that you want and the one you’re selling. Contingency offers help secure your intentions without you having to pay for unnecessary obligations. You can include a condition for the upcoming purchase if your current house sells. This can work to your advantage when you’re in a buyer’s market. It can also work if there is less demand for the home you desire. 

While having a contingency clause may at times weaken your offer, you counter this by offering a higher bid so the seller can wait until you’ve sold your house. You can even add in non-refundable earnest money to win the deal on your next dream home. 

#4 Make Gaps Work to Your Advantage

Sometimes circumstances do not work as planned, but don’t get disheartened. These are just momentary setbacks that may even give you time to improve your current home and increase its current market value. 

If you find yourself in your new home and stressing how to manage the former, you can consider renting it out to cover maintenance and mortgage costs. You can use Airbnb and other similar platforms to gain additional income from your property while the market is on a low. Once the conditions are right, you can sell your house for the price you want. 

If you take out a home equity loan, you can use it to renovate your old home and increase your home value. Some key features to spend on that have high ROIs include enhancing your curb appeal, taking care of house repairs early on, and updating your kitchen to give it a modern look. Spending considerable time and effort on your former property will surely enhance its chances of getting sold in the coming days. 

Conclusion 

Selling and buying are some of the less-traveled paths for homeowners because of their inherent risks. Taking on two mortgages when you do not have sufficient funds can be too much to handle, and taking out loans can add stress. 

You can make this strategy work to your advantage if you find the right tools to help you pull off both transactions simultaneously. Partnering with an instant house buyer can give you cash for your next purchase, while loans can provide you enough leeway to facilitate your move. Adding contingency offers allows you to address gaps as they happen without having to take on additional burdens or leaving you homeless at the very least.

Keep reading

Do You Pay Taxes When Selling Your House?
Great Ways to Increase the Value of Your Home: the 3 Areas with the Biggest ROI
Considering Buying a Home with a Crawl Space? Here’s What You Need to Know
A Brief Guide to Buying Real Estate: The Main Players in Your Next Home Search

Source: fancypantshomes.com

Long-Term Care Options and How to Plan for the Costs

Think for a minute about all the things you did when you woke up this morning. You probably got out of bed, walked to the bathroom, cleaned yourself up, brushed your teeth, got dressed, made yourself some breakfast, and headed out the door to go to work. These activities of daily living are so routine, you likely did them without even thinking about it.

Now imagine that you couldn’t do these things on your own. It could be because you’ve had an accident, you’re recovering from an operation, or you have an illness that limits your mobility. Whatever the reason, you now need help from another person to do many or even most of your basic daily activities — and you’ll continue to need it for weeks, months, or even years.

This kind of help is called long-term care, and there’s a good chance you or a close loved one will need it at some point in your life. According to the U.S. Department of Health and Human Services (HHS), a person who turned 65 today has almost a 70% chance of needing some form of long-term care in the future.

Needing long-term care isn’t just a physical burden; it’s a financial one too. According to the 2020 Cost of Care Survey by Genworth Financial, professional long-term care can cost anywhere from $1,603 to $8,821 per month. Most employer-sponsored health insurance plans don’t cover these costs, and even Medicare provides only limited coverage.

If you don’t want to risk being bankrupted by long-term care costs in the future, you need to do some planning now. Even if you don’t think you’ll need long-term care for many years to come — or at all — it’s better to think about it ahead of time than to take a chance on having to deal with both a health crisis and a financial crisis at once.

Options for Long-Term Care

When many people hear “long-term care,” they immediately picture a nursing home. However, it’s possible to receive long-term care in a variety of settings, which differ widely in terms of both comfort and cost.

The main forms of long-term care are:

1. In-Home Care From Relatives

Dealing with a long-term injury or illness can be a lot less stressful in your own home with familiar things and people around you. Thus, one common type of long-term care is to have a relative or friend tend to your needs at home.

While unpaid in-home care is easiest on the person receiving care, it can be difficult for the caregiver, both emotionally and financially. A 2018 Genworth study found that more than half of family caregivers had high levels of stress, and roughly one-third said their careers had suffered on account of their caregiving duties.

2. Home Health Aides

If you want to receive care at home without putting a burden on your relatives, you can hire someone to help you. A home health aide doesn’t provide medical care but can help with such daily tasks as bathing, dressing, and eating. The 2020 Genworth survey found that the median cost of a home health aide in 2020 was $24 per hour, or $4,756 per month.

3. Homemaker Services

Some people don’t need help with bathing or dressing, but they still need someone to handle daily chores they can’t manage on their own, such as cooking, cleaning, and running errands. For this, you can hire a homemaker service, which costs a bit less than a home health aide. Genworth put the median cost of homemaker services for 2020 at $23.50 per hour, or $4,481 per month.

4. Adult Day Care

Some older people can still get up and about, but they can’t be on their own for long periods of time. An adult day care program is a place where adults can go during the day and spend time with others, with a caregiver there to keep an eye on them. Adult day care programs can offer structured activities, meals, transportation, and sometimes health services. They’re cheaper than most long-term care options, at around $74 per day or $1,603 per month, according to Genworth.

5. Assisted Living

Home health aides can help with daily activities, but they can’t provide actual medical care. People who need regular medical supervision are better off moving to an assisted living facility. This is a place where people can live on their own in private apartments and have access to both personal care and medical care on site. The median cost for an assisted living facility was $4,300 per month in 2020, according to Genworth.

6. Nursing Home

Nursing homes provide the highest level of supervision and care. These all-inclusive facilities offer room and board, personal care, supervision, activities, medication, rehabilitation, and full-time nursing care. This level of care comes with a high price tag, however. Genworth found that in 2020, a semi-private room in a nursing home cost $7,756 per month, and a private room cost $8,821 per month.


Government Programs

Most Americans can’t afford to pay for professional long-term care out of their own pockets. A 2020 survey by The Ascent found that over half of Americans have less than $5,000 in savings. Roughly one-third have less than $1,000 — not enough to pay for even a single month of long-term care.

Government programs, including Medicare and Medicaid, can help you meet some of the costs. However, these programs offer only limited aid. Each one has specific rules about who qualifies for benefits, what services it covers, how long you can receive aid, and how much you must pay for on your own. If you need long-term care, it’s certainly a good idea to look at these programs first to see what they cover, but it’s a mistake to rely on them to pick up the whole tab.

Medicare

In most cases, Medicare does not include any long-term care benefits. However, there are several specific exceptions:

  • Skilled Nursing Facility (SNF) Care. If you come out of the hospital after a stay of at least three days, Medicare provides partial coverage for up to 100 days’ worth of medically necessary care while you recover. To receive this coverage, you must enter a Medicare-certified SNF or nursing home within 30 days after you leave the hospital. Medicare covers all of your treatment there for the first 20 days of your stay. Beginning on day 21, you must pay a daily copayment, which is set at $185.50 in 2021. Medicare covers any cost beyond this copayment up through day 100. If you still need care after that, you’re on your own.
  • Rehabilitation. If you have a condition that requires ongoing medical care to help you recover, Medicare provides partial coverage for a stay in an inpatient rehabilitation facility. It covers the cost of treatments such as physical therapy, meals, drugs, nursing services, and a semi-private room. However, you must pay an out-of-pocket cost for this care that depends on the length of your stay. For the first 60 days, you pay a $1,364 deductible. This cost is waived if you’ve already paid for a hospital stay for the same condition. For days 61 through 90, you pay $341 per day. After day 90, you start using up your “lifetime reserve days.” You have only 60 of these days over your lifetime, and each one costs you $682. If you still need care after your 60 days are used up, you must pay the full cost. Also, any extra costs during your stay — such as a private room, private duty nursing, or a phone or television in your room — are your own responsibility.
  • Home Health Services. You can also use Medicare to pay for in-home care for a specific illness or injury. This includes part-time or intermittent skilled nursing care, physical or occupational therapy, and speech-language pathology. To qualify as part-time, your care must cover less than eight hours per day, or less than seven days per week, over a total of three weeks or less. If you are receiving this type of in-home care, Medicare also pays for additional, basic care from a home health aide. Medicare does not cover care from a home health aide if that’s the only care you need, and it does not cover homemaker services under any circumstances.
  • Hospice Care. People who are terminally ill sometimes choose to spend their last days in hospice care. Hospice treatment focuses on relieving the patient’s pain, rather than trying to cure them. Medicare covers hospice care for patients who are terminally ill, are not seeking a cure, and do not expect to live more than six months. Patients can receive this kind of care in their own homes, a hospital, or another inpatient care facility.

For more details about what Medicare covers, see the Medicare website.

Medicaid

Unlike Medicare, Medicaid covers all types of long-term care. This includes both in-home care — such as a visiting nurse or a home health aide — and care in facilities such as nursing homes. You can get home health aide services from Medicaid even if you don’t need skilled care as well, and you can get care in a facility even if you aren’t recovering from a hospital visit.

However, Medicaid has strict limits on eligibility. You can’t receive Medicaid benefits if your income is above a certain level, which varies from state to state. Also, in some states, you cannot qualify unless you have dependent children. You can find the limits for your state through your state’s Medicaid website.

Veterans’ Benefits

The Department of Veterans Affairs (VA) covers the full cost of long-term care for veterans who have disabilities resulting from their military service. It also covers costs for veterans who can’t afford to pay for their own care. Other veterans receive some coverage, but they must pay a copayment. According to the VA site, the current copayments for long-term care are:

  • $97 per day for inpatient care, such as nursing home care
  • $15 per day for outpatient care, such as home health care or adult day care
  • $5 per day for domiciliary care in a special facility for homeless veterans

The VA site has more information about the health benefits available to veterans and how to qualify for them.

OAA Programs

Some states have their own separate programs to help provide care for adults over age 60. These programs get funding from the federal government under the OIder Americans Act (OAA). The OAA supports a wide network of state, local, and tribal agencies called the Aging Network. It works with tens of thousands of service providers and volunteers to deliver various types of care, including:

  • Meal delivery
  • Transportation
  • Home health services
  • Home health aide and homemaker services
  • Adult day care
  • “Respite care,” which gives family caregivers some time off from taking care of an older relative
  • Help using other government benefits

You can find programs in your area through Eldercare.gov.


Products to Help You Pay for Long-Term Care

Government programs don’t cover everybody, and the coverage they offer isn’t always enough to pay for the full cost of long-term care. To make up the difference, some people carry long-term care insurance, which provides coverage for this specific type of care. Others rely on other financial products designed for senior citizens, such as annuities and reverse mortgages, to cover their costs.

Long-Term Care Insurance

Long-term care insurance, or LTC insurance, works like other types of insurance. You pay a premium each month to the insurer, and if you ever need long-term care, it covers the cost. However, one big difference between this and most other types of insurance is that you have to qualify to buy a policy. If you’re already in poor health, there’s a chance you won’t be able to get a policy — and if you do, you’ll have to pay a steep price for it.

There are several ways to buy a long-term care insurance policy. The most common sources for policies are:

  • Insurance Specialists. You can buy LTC insurance through financial professionals such as insurance agents, brokers, and financial planners. To find insurance companies that offer LTC insurance, visit your state insurance department or do an Internet search for “long-term care insurance” plus the name of your state.
  • Employers. Although standard employer-sponsored health care plans don’t cover long-term care, many employers — including the federal government, many state governments, and some private companies — offer LTC insurance as an add-on that employees can purchase separately. To find out whether your employer offers this coverage, check with your pensions or benefits office.
  • Organizations. Some labor unions and other professional or trade organizations, such as the National Education Association, offer LTC insurance as a benefit to their workers. Membership organizations such as alumni associations or service clubs like the Lions and Elks can also take part in group plans.
  • State Partnerships. In some states, you can purchase LTC coverage through a State Partnership Program. These programs provide benefits partly through private long-term care insurers and partly through Medicaid. You can learn more details about these programs from the Department of Health and Human Services (HHS).

Although long-term care coverage can protect you from devastating long-term care costs, most Americans don’t carry it because of its high cost. According to the American Association for Long-Term Care Insurance (AALTCI), the typical annual premium for an LTC policy ranges from $1,400 to $3,100. This annual cost varies based on factors such as age, health, gender, location, and amount of coverage.

Financial planner David Demming, speaking with Policygenius, says LTC insurance is most likely to be a good deal for people aged 50 to 55 with a net worth between $1 million and $3 million. That’s enough money to afford the premiums, but not enough to cover the full cost of long-term care. To get a clearer idea of what LTC policy pricing could be for you, check out online calculators like this one from Genworth.

Annuities

Some people choose to fund their long-term care through an annuity, a financial product that pays out a fixed sum every year over a specific period. There are three kinds of annuities you can use for this purpose:

  • Immediate Annuities. With an immediate annuity, you pay a one-time premium, and in exchange the company pays you a fixed monthly benefit. This benefit can last for a specific period of time or the rest of your life. One advantage of an immediate annuity is that anyone can buy one, regardless of health status. This makes it a good option for people who no longer qualify for LTC insurance due to poor health. However, the fixed monthly sum you get might not be enough to meet your long-term care costs, and inflation can eat into its value.
  • Deferred Annuities. You can buy a deferred annuity with either a one-time payment, like an immediate annuity, or a series of regular payments. The money you pay into the annuity earns interest and grows tax-free. It doesn’t start paying out a monthly benefit until a specific date, such as your 65th birthday.
  • Long-Term Care Annuities. A long-term care annuity is a deferred annuity with a long-term care rider. This type of annuity doesn’t pay out until you need the money for long-term care costs. To collect the monthly payment, you must be diagnosed with a medical condition that requires long-term care, such as Alzheimer’s disease. According to HHS, this type of annuity is usually available only to people age 85 or younger who meet certain health requirements. However, according to SmartAsset, it’s sometimes easier to get approved for a long-term care annuity than for LTC insurance.

Depending on your situation, an annuity can be a cheaper way to cover long-term care costs than LTC insurance. However, it typically requires a large up-front payment, which is even higher if you already have health issues. Also, annuities can have a complicated effect on your taxes — HHS recommends consulting a tax professional before you buy one.

Reverse Mortgages

Another way to pay for long-term care services is with a reverse mortgage through LendingTree. This is a special type of home equity loan available only to homeowners age 62 and up, which allows you to get cash out of your home without giving up your title to it.

The house remains your property until you die. At that time, it goes to the bank unless your heirs choose to pay off the amount you’ve borrowed and keep the house. Otherwise, the bank sells the house and keeps the amount you owed at the time of your death. Any cash beyond that balance goes to your heirs.

There are several ways to get cash from a reverse mortgage. You can get one large lump-sum payment, a regular monthly payment, or a line of credit you can draw on as needed. The second two options are most useful for paying long-term care expenses. As long as you spend the payments in the same month you receive them, the money is not taxable income and doesn’t affect any government benefits, such as Social Security, Medicare, or Medicaid.


Long-Term Care Planning

Dealing with long-term care can be an emotional and financial burden, both for you and for your family. The best way to lighten that load is to plan ahead. By making your plans early, you’ll have plenty of time to do research, make decisions, and buy traditional long-term care insurance or any other products you need to cover the costs.

1. Research Your Options

Start by looking into the options for advanced care in your area. Check the phone book or do an online search to find out what choices you’re likely to have for assisted living and nursing homes, as well as home health aide and homemaking services. The Genworth Cost of Care Survey tool can help you estimate what these services cost now and what they’re likely to cost in the future. You can also check the costs for services in other areas to figure out whether relocating would save you money.

2. Talk to Your Family

Once you have some idea of available options, talk to your family members and get their input. Set aside a time when you can talk everything over in person without having to rush. Here are some points to discuss:

  • Your Lifestyle. Discuss the way you live now and how you expect to live in the future. For instance, if it’s important to you to stay at home and live independently, let your family know that. Tell them about your priorities, and find out what’s important to them, as well.
  • Your Care Options. Show your family the research you’ve done on care options in your area. Tell them how you’d prefer to receive care and whether you have a specific provider in mind. Also, find out how much of your care your loved ones are able and willing to take on themselves. If you have several relatives who could help you, talk about which specific responsibilities each of them could handle.
  • Your Finances. Once you’ve considered what kind of care you want, talk about what it’s likely to cost. Let your family know how much money you can set aside now toward your future care needs, and find out if any of them are willing to contribute.
  • Medical Care. Make sure your family knows your health history in detail so they can supply it to a doctor if they need to. Also, make sure they know how to contact all of your current medical providers.
  • Legal Issues. Decide who should be responsible for making medical decisions for you if you can’t make them yourself. Use this information to set up a durable power of attorney for the future. Also, talk to your loved ones about your wishes for end-of-life care. If you already have a living will, tell them what it says and where to find it; if you don’t have one, make plans to set one up.

3. Calculate the Cost

Now that you have some idea who will provide care for you when you need it, the next step is to figure out how much it will cost. Even if your family has offered to provide unpaid care for you when you need it, there could still be some cost involved. For instance, you could choose to hire a house cleaning service so your loved ones won’t be responsible for all the housekeeping chores in addition to your care.

If you’re planning to pay for professional long-term care services, think about how long you’re likely to need them. According to the HHS, people who require long-term care use it for an average of three years. This includes an average of two years of in-home care and one year in a long-term care facility. About one in five people need care for more than five years.

To figure out the total amount you’ll need for long-term care costs, multiply the cost by the expected length of care. For instance, suppose a home health aide costs $60,000 per year and assisted living costs $90,000 per year. If you expect to need two years of home health care and one year in assisted living, you must save up a total of $250,000.

If the total cost looks like more than you can possibly afford, look for ways to save on long-term care. This could include relying on family care, negotiating prices, getting help from government programs, or relocating to a cheaper area.

4. Make a Plan to Cover the Costs

Once you have an idea of how much money you’ll need for long-term care, you can start figuring out how to pay for it. If your income and assets are low enough, you can look to Medicaid for help when you need care. State government programs could also provide some help.

By contrast, if you have a lot of liquid assets — that is, cash, retirement savings, and other assets you can easily convert to cash — you might be able to pay for your care out of pocket. Financial planners interviewed by Policygenius say this is most practical for people with a net worth of at least $3 million.

If you’re somewhere in between those two extremes, you’ll need some other way to meet the costs of long-term care. That could mean buying long-term care insurance, investing in an annuity, or taking out a reverse mortgage. A financial planner can help you compare these options and decide which one is best for you.

5. Put Your Plan in Writing

After you’ve come up with a plan to meet your long-term care needs, the final step is to put it in writing. Having a written plan gives your family something to consult if there’s ever any confusion or uncertainty about your wishes.

If you’ve decided to make a living will or set up a durable power of attorney, these documents should be part of your written care plan. Consult a lawyer to help you set these up. Give a copy of the entire plan, including the legal documents, to any relatives it could affect.

Putting your plan in writing doesn’t mean it’s set in stone. If your health or financial situation changes in the future, your long-term plans might need to change too. Update your plan as needed, and make sure your relatives always have the latest version.


Final Word

If you’re young and healthy, you may feel like it’s too soon to start thinking about long-term care. Since you probably won’t need it for many years, you figure you can just wait and deal with it when the time comes.

However, there are several good reasons why now is exactly the right time to think about it. First of all, the future is unpredictable. Even young people can suffer injuries or develop illnesses that keep them off their feet for months.

Also, LTC insurance gets more expensive and harder to obtain as you age. If you decide to wait until you’re 65 before buying a policy, it could already be too late to qualify. And even if you can get one, you’ll pay a much steeper rate for it than you would if you’d bought it 10 years earlier. So it makes sense to start thinking about this type of insurance and decide whether it’s for you before you hit age 55.

Finally, if you put off thinking about long-term care until you actually need it, you’ll have to make a whole lot of important decisions in a hurry. You could end up making choices that aren’t best for you because you don’t have time to weigh the options. By avoiding procrastination and thinking it through now, you can ensure that when — or if — you finally need long-term care, it will be as easy as possible for you and your family.

Source: moneycrashers.com

Land is in big demand as investors seek safe-haven

U.S. land brokers are reporting an increase in deals and a rise in land values due to what they say is growing demand for rural land.

That’s according to a survey of more than 100 land brokers in the U.S. carried out by National Land Realty, and the findings suggest that we’ll see more of the same in 2021, with even more land purchases expected to take place.

The survey found that more half of the brokers saw an increase in business last year compared to the year prior. Over 60% of respondents said that land values were up too, especially farmland and recreational land.

National Land Realty Chief Executive Jason Walter said the growing demand was due to investors seeking a safe haven in land at a time when the economy was being wrecked by the COVID-19 pandemic. He noted “record-breaking volume” in the second half of the year.

“With all of the traumatic events of 2020, people are looking to not only invest in land outside of the city, but they are also wanting to live on the land they buy, to be able to breathe the fresh COVID-free air and reconnect with the great outdoors,” he said.

That’s backed up by the survey findings, with brokers reporting that the majority of recent land buyers come from urban or suburban areas.

Almost 90% of the brokers surveyed believe that land sales will continue to perform strongly over the next year to 18 months, according to the survey. “And more than 75 percent of [land brokers] believe their business will grow at least 5 percent, if not more than 10 percent, in that same time frame,” added Jason Burbage, president of National Land Realty.

The biggest challenges in 2021 moving forward, land brokers say, will center around geopolitical risk (nearly 24%), followed by financing or interest rate risk (20%) and COVID-related issues (17%).

Source: realtybiznews.com

What Is a SIMPLE IRA and How Is It Different?

Small companies tend not to offer 401(k) plans, given the administrative costs and headaches associated with them. So where does that leave employees and owners of small businesses who want retirement benefits?

There’s a type of employer retirement account specifically for small businesses called the Savings Incentive Match Plan for Employees – or, as less of a mouthful, its acronym: the SIMPLE IRA. Here’s what you need to know about it.

What Is a SIMPLE IRA?

Like both IRAs and 401(k) accounts, SIMPLE IRA accounts provide a tax-deferred way to save and invest for retirement. Contributions are pre-tax, meaning they come off employees’ adjusted gross income. In other words, the income you contribute to a SIMPLE IRA is not subject to income taxes. And, as with IRAs and 401(k)s, the IRS imposes contribution limits each year on SIMPLE IRAs.

Yet despite the name, SIMPLE IRAs share more in common with a 401(k) than a traditional IRA.


How SIMPLE IRAs Differ From Other IRAs

First and foremost, traditional IRA accounts are created and maintained by the employee. The employee owns the account in every way. By contrast, SIMPLE IRA accounts are employer-sponsored accounts, typically created and maintained by the employer. Normally, the employer chooses a brokerage, such as Schwab or Vanguard, to hold employees’ SIMPLE IRA accounts. That isn’t always the case, though; the employer can opt to leave it up to employees to open and maintain their own SIMPLE IRA accounts.

The contribution limits are also higher for SIMPLE IRAs than for traditional and Roth IRAs. For the tax year 2021, the contribution limit for SIMPLE IRAs is $13,500 for taxpayers under 50, and taxpayers over 50 can make an extra catch-up contribution of $3,000, for a total limit of $16,500. Contrast that with $6,000 for traditional and Roth IRAs with a $1,000 catch-up option for taxpayers over 50.

Speaking of Roth IRAs, there is no Roth option for SIMPLE IRAs. That means you can’t opt to pay taxes on the contributions now and take the earnings tax-free in retirement.

Contributing to Both an IRA & a SIMPLE IRA

Modest-income taxpayers can contribute to both a traditional or Roth IRA and a SIMPLE IRA through a broker like TD Ameritrade. The same IRS contribution rules apply to both SIMPLE IRAs and 401(k)s when combined with traditional or Roth IRAs. Above a certain income, your ability to contribute to both an IRA and an employer-sponsored retirement plan phases out, and at a certain level, it disappears entirely; see IRS deduction limits here.


How SIMPLE IRAs Differ From 401(k)s

As an employer-sponsored plan, SIMPLE IRA accounts are a cheaper, more flexible alternative to 401(k)s for small businesses with fewer employees. Employers contribute money, but without the administrative headaches and fees that come with 401(k)s.

One similarity worth noting between SIMPLE IRAs and 401(k)s is the income cap on employer contributions. Employers can only contribute based on the first $280,000 of an employee’s income; after that, all obligation ends on the part of the employer.

However, employee contribution limits for SIMPLE IRAs, as outlined above, differ from those for 401(k)s. Employees can contribute more to 401(k) accounts – up to $19,500 per year for employees under 50 or $26,000 per year for employees over 50.

And the differences don’t end there.

1. Contribution Requirement

With a 401(k), employers are not obligated to contribute any money to their employees’ retirement savings. That’s not so with SIMPLE IRAs. For these accounts, employers are legally required to offer one of two contribution plans for employees:

  • A “nonelective” contribution equaling 2% of the employee’s salary, no strings attached.
  • A matching contribution of up to 3% of the employee’s salary. If the employee doesn’t contribute, the employer doesn’t contribute.

With the latter, the employer can opt to only match 1% of the employee’s contributions for two out of five consecutive years. That’s a particularly useful caveat for startups tight on cash in their early years.

The contribution requirement applies to all employees earning $5,000 or more in each of the last two years who have a “reasonable expectation” of earning over $5,000 this year. For 401(k) accounts, employers typically require one year’s service – the legal minimum – rather than two. Employers must include SIMPLE IRA coverage for part-time employees earning $5,000 or more, not just full-time employees.

Two other exceptions exist: Employers can exclude employees who receive benefits under a collective bargaining agreement and nonresident alien employees who received no U.S. source income.

2. Rollover Restrictions

Unlike with a 401(k), employees must have participated in a SIMPLE IRA account for at least two years in order to roll it over to a different type of retirement account, such as a traditional IRA or 401(k). If they’ve participated for less than two years when they change jobs, they can only roll over funds to another SIMPLE IRA account.

That makes it tricky for employees moving to a new company that doesn’t offer a SIMPLE IRA. After all, forgetting about past employers’ retirement accounts is a classic retirement planning mistake to avoid.

Fortunately, once two years have passed since the first contribution to a SIMPLE IRA, employees can then roll over the funds to a different type of retirement account – with the exception of a Roth IRA since there is no Roth option for SIMPLE IRA accounts.

If you’re trying to roll over funds after changing jobs, read up on the rollover process for SIMPLE IRA accounts.

3. Greater Investment Flexibility

One drawback of 401(k) plans is that employees are stuck with whatever investment options the plan administrator offers. But since employees open SIMPLE IRA accounts directly with a brokerage, they can choose their own investments, such as stocks, bonds, mutual funds, and ETFs. Most brokerages allow employees broad flexibility to choose investments. Employees can even invest in target-date funds in most cases, relieving them of worrying about shifting their asset allocation as they approach retirement.

4. Easier & Cheaper for Both Employees & Employers

Instead of hiring a 401(k) plan administrator, employers can simply open accounts with a brokerage. That means they can avoid both the initial setup fee and, in some cases, ongoing maintenance fees. For example, Charles Schwab charges no monthly or annual fees for SIMPLE IRA accounts. That’s a stark contrast to 401(k) fees, which can be high for both employers and employees.

There is one drawback to keep in mind: Unlike with a 401(k), employers must set up a separate account for each employee – if they take on the responsibility of opening the accounts, that is. Employers can opt to let employees open their own SIMPLE IRA accounts. In that case, all employers have to do is fund the accounts each payroll cycle.

5. Higher Penalties for Early Withdrawal

When you take an early withdrawal or distribution from your retirement account before age 59½, the IRS frowns upon it. It then slaps you with both a 10% penalty and the full income taxes due on the money you withdrew. That applies to IRAs, 401(k)s, 403(b)s, and SIMPLE IRAs.

But SIMPLE IRAs don’t stop there. If you take a distribution before you turn 59½ and within the first two years of participating in your SIMPLE IRA plan, the penalty increases from 10% to 25%.

There are a couple of exceptions to this penalty. You can avoid it if:

  • You incur non-reimbursed medical expenses and use the withdrawal to cover them.
  • You receive the SIMPLE IRA account from someone who died.

6. Company Size Restrictions

Unlike a 401(k), SIMPLE IRA accounts are only for small businesses. Companies must have under 100 employees to qualify as small enough to offer a SIMPLE IRA – specifically, 100 eligible employees who earn $5,000 or more each year. Employees earning under $5,000 per year don’t count toward the cap, nor do independent contractors. Anyone paid via 1099 also doesn’t count toward the employee limit.

Similarly, small-business owners aren’t obligated to pay SIMPLE IRA contribution benefits to independent contractors, unlike part-time employees.

7. No Loans Allowed

While many 401(k) administrators allow employees to borrow money from their 401(k) accounts, the same is not true of SIMPLE IRAs. They share this feature with traditional IRAs. So don’t count on pulling money from your SIMPLE IRA in a pinch without incurring distribution penalties.


Creating a SEP IRA vs. a SIMPLE IRA

For self-employed workers and small companies with only a few employees, a SEP IRA may be a better choice. That’s because the contribution limit for SEP IRAs is a whopping $58,000 per year. Even though self-employed people can contribute $13,500 on the employee side and up to another $13,500 on the employer profit-sharing side for SIMPLE IRAs, the contribution limit for SEP IRAs is still more than double that. Prior year contributions are also allowed in SEP IRAs, unlike with SIMPLE IRAs.

Before deciding between a SEP IRA and a SIMPLE IRA, speak with your tax preparer or another financial advisor.


5 Steps to Create a SIMPLE IRA

Interested in moving forward with a SIMPLE IRA retirement savings plan for your small business? Here are five quick steps to follow.

Step 1: Confirm Eligibility

As long as you have fewer than 100 employees earning $5,000 per year or more, your business qualifies. It’s as simple as that.

Step 2: Pick a Provider

Choose a brokerage firm that offers SIMPLE IRA accounts. Notable examples include TD Ameritrade, T. Rowe Price, Fidelity, Vanguard, Charles Schwab, Edward Jones, and most other big-name brokerage firms.

Make sure you clearly understand the fee structure before committing. For example, Vanguard charges $25 per account per year but waives the fee for high-value accounts. As mentioned above, Schwab doesn’t charge a maintenance fee on SIMPLE IRA accounts.

Step 3: Complete the IRS Forms

The IRS wouldn’t be the IRS if they didn’t make you fill out forms.

While your brokerage provider will have their own forms they require you to fill out, you also need to give a specific form to your employees. Which form you need depends on who’s opening the SIMPLE IRA accounts.

  • IRS Form 5305-SIMPLE. If you open SIMPLE IRA accounts with the brokerage yourself on your employees’ behalf, use this form.
  • IRS Form 5304-SIMPLE. If you have your employees open their own SIMPLE IRA accounts with the brokerage of their choice, use this form.

Employers do not need to file this form with the IRS but should keep copies in case they ever get a call from Uncle Sam.

Step 4: Enroll Your Employees

Typically, your plan provider helps you enroll your employees. They provide the signup and enrollment links, normally handling it all online.

One quirk worth noting, however, is that employers can only set up a SIMPLE IRA during the first three quarters of the year. After October 1st, companies have to wait until the following year if they want to create a SIMPLE IRA.

Step 5: Set Up Contribution Payments

Making payments simply involves setting up direct deposits from payroll for each participating employee. Remember, contributions must be taken out before payroll taxes are processed. Otherwise, it would defeat the entire purpose.


Final Word

For small businesses, offering employees a SIMPLE IRA is a low-cost, low-headache alternative to a 401(k) plan. With no setup fees and potentially no maintenance fees, the only significant costs to employers are the contributions themselves.

Still, SIMPLE IRAs come with their own rules, requirements, and restrictions, so make sure you understand them all before making any commitments to employees.

Source: moneycrashers.com

Can you use a 203k loan for an investment property?

203k loans for investors: A special use case

The FHA 203k rehab loan can be an affordable way to buy or refinance a home and refurbish it with a single loan. 

This might make the 203k loan attractive to investors and fix-and-flippers. But there’s a catch.

These mortgages are limited to ‘primary residences,’ meaning the borrower has to live in the home full time. So they’ll only work for specific types of investment properties. 

But there are ways to legally and ethically use a 203k loan for rentals and investments. Here’s how.

Verify your 203k loan eligibility (Feb 23rd, 2021)


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FHA 203k loan for investment properties

There’s only one legitimate way to use a 203k loan for an investment property. You can buy and renovate — or construct or convert — a multifamily (2-4 unit) building and live in one of the units.

FHA allows borrowers to purchase 2-, 3-, and 4-unit properties and renovate them using the 203k loan.

To fulfill FHA’s residency condition, you’ll need to occupy one of the units yourself as your primary residence for at least 12 months.

You can rent out the other unit(s), and even use the rental income to cover your monthly mortgage payments.

Benefits of the FHA 203k loan for investors

While this might not be your first idea of an investment property, it can be a foot in the door for first-time investors who want to test out owning and renting properties.

It’s also worth noting that since you’d be buying the property as a primary residence, you get access to lower interest rates.

This means you’d have lower monthly payments and pay less interest overall compared to someone with a ‘true’ investment property mortgage.

Drawbacks

The main downside to this strategy is that you yourself need to occupy one of the units for at least one year.

After 12 months, you could rent out the unit that you live in and move on to purchase other real estate.

But FHA is not for serial investors. Once you use one FHA loan, you likely can’t get another one. You’ll have to secure other financing if you move out and buy again.

Also, keep in mind that you will be living side by side with your future tenants for those 12 months — some may consider this a downside while others won’t mind.

Another downside: FHA loans come with pricey mortgage insurance premiums (MIP) which borrowers are normally stuck with until they sell or refinance into a different loan program.

So there’s a lot to consider before going the 203k investment property route.

But for the right borrower, this could be a great strategy to finance and renovate their own home and a few rental units at the same time.

Verify your 203k loan eligibility (Feb 23rd, 2021)

Can I use a 203k loan if I already own the home?

If you already bought your home, you can use a 203k rehab loan to refinance your current mortgage. This opens up another back door for investors.

You could potentially use the 203k loan to refinance your current home, make renovations, then move after one year and rent the house out as an investment property.

FHA allows you to rent out a home you still own with an FHA loan, as long as:

  • You fulfilled the one-year occupancy requirement
  • You moved for a legitimate reason, like a work relocation or upsizing to a bigger house for a growing family

This would only work for refinancing a home you currently live in and plan to keep occupying for at least a year after the loan closes.

If you already moved and kept your previous home as a rental property, you would not be able to use the 203k rehab loan since the home is no longer your primary residence.

How does the lender know if it’s my primary residence?

Some people make good livings by buying fixer-uppers and then selling them after rehab — aka “flipping” them.

A few might be tempted to take advantage of the 203k program by lying about their intention to live in the home. After all, how can the FHA prove in court what your intentions were when you made the application?

The main argument against this strategy is that lying on a mortgage application can be a felony that could see you in federal court.

Even an email to a contractor mentioning that you don’t intend to live there or other indication of your plans could show up in the court case.

And, repeat FHA buying would not be a viable long-term strategy.

FHA only allows borrowers to have one active FHA loan at a time, except in rare circumstances (for instance, if your work required you to relocate and you needed to buy another home near your new job).

In other words, borrowers cannot move once a year and continue financing new homes with FHA loans.

If you see yourself as an entrepreneur with a rosy future in real estate investing, set yourself up for success by choosing a legitimate financing option that keeps your options open in the long run.

Check your investment property loan options (Feb 23rd, 2021)

About the FHA 203k rehab loan

The 203k rehabilitation loan is backed by the Federal Housing Administration (FHA), an arm of the U.S. Department of Housing and Urban Development.

This mortgage program lets you buy a rundown home — a fixer-upper — and then renovate it using a single loan that covers the purchase price and cost of repairs.

If that involves demolishing the existing structure down to the foundations and rebuilding, that’s fine under 203k loan rules, too.

203k renovation loans are only for necessary repairs to improve the structure or livability of the home. So the funds can’t be used to add luxuries like tennis courts or swimming pools.

And there’s one more important rule: You cannot do the construction or remodeling work yourself. The 203k loan requires you to hire a reputable, licensed contractor, unless you are one yourself and you work full-time as a contractor.

Limited vs. Standard 203k mortgage

There are two flavors of the 203k program: the “Limited 203k mortgage” and the “Standard 203k.”

The Limited 203k used to be called the “Streamline 203k.” As its new name implies, this version is more restrictive about the amount you can spend and the types of work you can do. But it’s also less complicated, hence its former “streamline” moniker.

The maximum repair budget for a Limited 203k loan is around $31,000 ($35,000 officially, but there are mandatory reserve accounts that eat into that sum). And you can’t make any structural renovations to the home.

On the plus side, these loans require much less paperwork and hassle.

The Limited 203k loan is typically best for current homeowners who want to make cosmetic repairs or renovations. It works a bit like a cash-out refinance, except you must spend the money on the home improvements you’ve listed.

A “Standard 203k loan,” by contrast, allows much higher budgets and would be better for home buyers purchasing serious fixer-uppers that need structural repairs.

FHA loan requirements

The basic requirements for 203k loans are similar to those for other FHA mortgages:

  • A 3.5% down payment — Based on your purchase price and rehab budget combined, subject to an independent appraisal
  • Minimum 580 credit score — It may be possible to dip below 580 if you have a 10% or higher down payment
  • Debt-to-income ratio of 43% or less — No more than 43% of your gross monthly income can normally be eaten up by housing costs, existing debt payments, and other inescapable monthly obligations such as child support

Although the FHA sets these minimum requirements, you’ll be borrowing from a private lender. And they’re free to impose their own standards.

For example, some mortgage lenders require a credit score of 620 or 640 for an FHA loan. If one lender has set the bar too high for you, shop around for other, more lenient ones.

Verify your FHA 203k loan eligibility (Feb 23rd, 2021)

What repairs can you do with a 203k loan?

The FHA is putting up taxpayers’ money to guarantee part of your mortgage. So it’s not in the business of writing loans for luxury upgrades.

There are strict rules about the types of home renovations you can do and the amount of money you can borrow.

In fact, the total amount you can borrow for your home purchase and renovation costs is governed by current FHA loan limits, which vary depending on local home prices.

You can find the loan limit where you wish to buy using this lookup tool.

Maximum rehabilitation loan budgets

We already mentioned that a Limited 203k loan gives you a cap of around $31,000 on your rehab budget.

A Standard 203k lets you have as big a rehab budget as you want, capped only by your local loan limit minus the home’s purchase price.

Your total loan amount can be up to 110% of the property’s future value when complete.

But an appraiser will pore over your plans to make sure the final value of the home — after your projects are completed — will match the amount FHA is lending you.

What you can spend your rehab budget on

The Limited 203k is mostly intended for refreshing a home that’s a bit tired. So you can do things like:

  • Replacing flooring and carpeting
  • Installing or replacing an HVAC system
  • Remodeling a kitchen or bathroom
  • Fixing anything that’s unsafe
  • Making the home more energy-efficient

But you can’t use the money to do structural work, such as moving loadbearing walls or adding rooms.

The Standard 203k is very different.

You can do all the above and almost everything else, including serious construction work. Heck, you can even move the house to a different site if you get the FHA to approve your plans.

The 203k loan process

Limited 203k loans are pretty straightforward. Indeed, they’re easier than most to qualify for and set up.

But a Standard 203k isn’t like that. It may be your best path to your dream home. But there will be some extra hoops to jump through compared to a traditional mortgage.

Here’s the basic process to apply for and close an FHA 203k loan.

  1. Find your best lender — You can save thousands just by comparison shopping among multiple lenders. They aren’t all the same! Make sure the ones you consider offer FHA 203k loans and are experienced in delivering them. You’ll want a lender familiar with the specifics of 203k loans to make sure the process goes smoothly
  2. Get pre-approved — Pre-approval shows you your exact budget as well as your future interest rate. And you’ll get a chance to resolve any issues that arise in your application
  3. Find the home you want — This is the fun bit. But download the Maximum Mortgage Worksheet PDF from HUD’s website because that will help you assess whether your plans are affordable
  4. Find a 203k consultant — A 203k loan consultant will visit the home site, inspect the building, and then prepare a document outlining the project’s scope and specifications, along with a detailed cost breakdown for each of the repair tasks. He or she also prepares lender packages and contractor bid packages, along with draw request forms for stage payments
  5. Find a licensed contractor — Some lenders maintain lists of approved contractors. And your consultant may help you find a reputable one. Make sure candidates have proven records for projects similar to yours and are familiar with FHA 203k jobs. Many contractors add serious delays to 203k approval because they can’t seem to complete the paperwork correctly
  6. Have the home and project appraised — The lender will set this up for you
  7. Begin work — Once the appraisal is approved, the lender should let you close. And your contractor can then begin work, drawing on funds in an escrow account

Limited 203k loans require the borrower to live in the home while repairs are completed. So if it’s a new home purchase, you’ll have to move in within 60 days, which is the norm for FHA loans.

Standard 203k loans, on the other hand, might include structural repairs that render the home unlivable while construction is going on. In this case, the home buyer is not required to move in right away.

Rehab loan alternatives for investment properties

FHA 203k loans aren’t the only way to buy and renovate a home with one loan. Fannie Mae’s HomeStyle Renovation and Freddie Mac’s CHOICERenovation products can do much the same thing.

Since the HomeStyle and CHOICERenovation loans are conventional mortgage loans, they won’t charge for private mortgage insurance (PMI) if you put at least 20% down. This can save home buyers a lot of money on their monthly mortgage payments.

However, like the 203k loan, these programs are only available for primary residences.

If you’re buying a ‘true’ investment property — meaning you won’t live in one of the units yourself — these loans aren’t an option.

But investors have other renovation loans to choose from.

Traditionally, you would buy a home with a mortgage and then borrow separately — perhaps with a home equity line of credit or home equity loan — to make improvements. Then you could potentially refinance both loans into one later on.

Another option is using a cash-out refinance on your investment property or primary residence and putting the cashed-out funds toward repairs or upgrades.

Of course, all these types of loans require you to have enough equity built up to cover the cost of repairs.

And if you choose to draw from the equity in an existing investment property, you’ll pay higher interest rates.

But the upside is that there are no rules about how the funds can be spent. So if luxury upgrades are on your agenda, this could be the way to go.

Explore all your options

FHA 203k loans are only available to a select group of investors: Those who will buy a multi-unit property and live in one unit themselves.

For real estate investors looking to fix-and-flip or build a large portfolio of investment properties, an FHA loan isn’t the right answer. But there are plenty of other financing options out there.

Be sure to explore all your loan options before buying or renovating a home. Choosing the right program and lender can help you achieve your goals and save money on your project.

Verify your new rate (Feb 23rd, 2021)

Compare top lenders

Source: themortgagereports.com

15 Cities Where Homes Are Selling the Fastest

COVID-19 has brought tremendous volatility to many economic sectors, and one area where the effects have been felt most strongly is real estate.

In most areas, the onset of the pandemic last spring temporarily brought the real estate market to a standstill. Economic uncertainty was high as businesses shut down, making both buyers and sellers hesitant to enter the market, while stay-at-home orders and health and safety fears made it harder to arrange showings, inspections, and in-person meetings during the closing process.

As time has gone on, however, demand in the real estate market has picked up in a dramatic way. With the transition to working and schooling from home, families are increasingly seeking out homes with more space and amenities. Moreover, government efforts to stimulate the economy have kept interest rates low and provided relief to households through expanded unemployment benefits and direct payments. Simultaneously, shifts in consumer behavior have pushed savings rates higher over the last year. This combination of factors has given more buyers the desire and the means to look for homes.

Despite this, increased demand from buyers has not been met with an equal willingness of homeowners to sell. Some would-be sellers remain worried about risking COVID-19 exposure from tours and showings, but economic conditions may be the main reason why current homeowners are opting to hold onto their properties. For example, the same low interest rates that are enticing prospective buyers also make it easier for homeowners to refinance and stay put. Since selling one house frequently means buying another, sellers may look at a competitive market with many buyers and decide to avoid the hassle.

The overall effect is a market with unusually constrained supply of homes for sale. Real estate inventory usually shifts on a seasonal basis, dropping in the winter and picking up in the warmer months. COVID-19 interrupted these trends when the pandemic emerged in March. Inventory held flat during the spring but began to decline soon after. By December 2020, the number of active listings on the market was nearly 40 percent lower than at the same point in 2019.

Limited supply has affected sales in two major ways: first, prices are much higher, and second, homes are flying off the market. As with inventory, time to close usually follows seasonal patterns, with sales taking longer in the winter and less time in the warmer months. And here again, COVID-19 had a strong impact: sales were unusually slow after stay-at-home orders took effect but accelerated again over the course of the year. The median number of days a home spent on the market in the last quarter of 2020 was more than 15 percent lower year-over-year than the same period in 2019.

And as with all real estate, location matters. Demand—and with it, the speed of sales—are especially high in Western and Southwestern states that have been experiencing the highest rates of population growth. This includes the three states where homes are selling the fastest: Washington, Nevada, and Arizona.


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